Sports & Entertainment 2015: Roundtable

Which areas have seen an increase in activity over the past 12 months? And what is coming?

Antonio Rigozzi: The sports legal sector in Switzerland, which is predominantly made up of international level sports disputes coming before the Court of Arbitration for Sport (CAS) in Lausanne and before Switzerland-based international sports federations, has remained healthy in the last 12 months.

Whilst the number of disputes appears to have remained steady across the different sports, there are some areas which have shown particular growth. One area would be disputes before UEFA’s Club Financial Control Body as UEFA has begun to pursue cases and impose sanctions on clubs which potentially contravene its Financial Fair Play Regulations. There also appears to be a steady growth in cases coming before UEFA disciplinary bodies connected to its annual Champions League and Europa League competitions. The qualification matches for UEFA’s EURO 2016 have also generated significant cases (at the UEFA and the CAS levels).

Other developments of particular note in football include the area of contractual stability under FIFA’s Regulations on the Status and Transfer of Players, with a significant case before CAS between Chelsea and Juventus likely to have consequences for the football market. In particular this case is likely to be very relevant where a player is terminated for just cause and the player then signs to a new club. Additionally, the very recent move by FIFPro (the union football players) to file a complaint against FIFA before the European Commission seeking to remove transfer fees suggests that the areas of intra-club transfers and contractual relationships between football players and football clubs will continue to generate significant disputes.

One emerging area of particular relevance to Swiss lawyers practising in sports law relates to enforcing certain of CAS financial awards through asset freezing proceedings before local courts in Switzerland. As many football clubs and national associations participate in competitions where money is to be paid by governing bodies in Switzerland, there is a growing awareness that this provides a viable means to recover amounts owed.

Benoît Keane: European law applies to both the regulatory and commercial aspects of sport. In recent years, the spotlight has been upon the regulatory aspects of sport such as integrity in sport, financial fair play and transfer rules. Many of these regulatory cases are still in progress. Looking ahead, it seems to me that the application of EU law to the commercial aspects of the sports and entertainment sectors is likely to come to the fore once again. The European Commission recently launched a wide-ranging competition-sector inquiry into the licensing of online digital content. Separately, the Commission is investigating the territorial licensing systems of the major film studios to determine whether they are artificially dividing up the market. These competition inquests could have a profound impact upon the sports and entertainment sectors in Europe.

Susan Abramovitch: A major area of change in entertainment is in the way content is being consumed. The increased prominence of on-demand streaming services, as well as the increase in content created specifically for online consumption, has led to an increased focus on several topics impacting entertainment law including, among other things: the fair compensation of content creators for the exploitation of their works online, geo-blocking and the cross-border access of streaming content and renewed calls to review the content requirements for online streaming services.

Sven Demeulemeester: There is an increase in litigation between sports governing bodies and certain stakeholders impacted by those sports governing bodies’ regulations. Referring to the principle of freedom of association and the specificity of sport, governing bodies impose rules and restrictions on other sports stakeholders. The challenge of FIFA’s TPO ban by investors and FIFA’s intermediaries regulations by agents’ representative bodies springs to mind as well as a challenge of UEFA’s FFP regulations by intermediaries and supporters. A recent example of the latter has been FIFPro’s challenge to the football transfer system. These matters will continue to be at the top of the sports law agenda.

Jamie Nettleton: There has been a much greater awareness of the necessity to put in place controls to maintain the integrity of sports; also, sports have been more proactive in understanding the nature of “sports fixture rights”, the attendant sports integrity controls and the necessity to enter into partnerships with licensed bookmakers to obtain that information.

The legal issues relating to sports betting are expanding. This has occurred due to greater regulatory oversight and despite the increased concentration in the market.

Of particular interest from the perspective of major sports is the greater awareness of the value of digitised rights.

How have the recent scandals in sport, such as doping and the allegations of corruption within FIFA, affected your practice?

Antonio Rigozzi: I believe that the impact for sports lawyers of scandals such as the recent ones alleging the possibility of widespread doping in athletics and alleging unethical activity by some FIFA officials can be overstated.

It remains unclear as to whether the doping rumours in athletics will culminate in any doping/disciplinary proceedings. It is similarly unclear as to whether there would be sufficient evidence to instigate proceedings or as to the extent to which such proceedings may be time-barred.

On the FIFA developments that have been occurring since May there are clearly significant criminal investigations both in Switzerland and the United States which would fall outside of the practice area of lawyers specialising in sports disputes. One consequence of these developments which could affect my practice would concern the possibility of significant disciplinary cases against FIFA officials which could be instigated by the Investigatory Chamber of the FIFA ethics committee. It is conceivable that this could culminate in proceedings before CAS.

Benoît Keane: In my experience, sports organisations take the protection of integrity extremely seriously – both on and off the field. In recent years, there have been a number of challenges under EU competition law to sports measures designed to protect integrity. However, European law has long recognised that sports organisations must be able to take proportionate but dissuasive measures to protect the integrity of competitive sport. A major step in the fight against corruption in sport was taken last year (2014) when the Council of Europe adopted a Convention against the manipulation of sport. However, the recent scandals show that sports organisations need to be more vigilant than ever to ensure that their governance structures as well as their sporting disciplinary structures are sufficiently robust. EU policymakers are taking a close interest in how sports governing bodies tackle these major challenges in line with EU law and the new Convention.

Susan Abramovitch: Scandals involving celebrities of any industry can have a profound impact, particularly where those celebrities are party to sponsorship and endorsement agreements. Through social media, both celebrities and companies have more direct access to their fans and customers. This, coupled with the speed at which news regarding scandals spreads, means that counsel need to move quickly to take action to protect their clients’ interests.

Sven Demeulemeester: We have seen increased client awareness that sport is not that different from any other business activity. Compliance programmes are being strengthened and codes of conduct are being “fine-tuned”.

Jamie Nettleton: There have been limited ramifications on our practice arising from the developments within FIFA.

However, in the context of Australian sports, and particularly racing, there have been a number of developments. The most high-profile relates to “live baiting” within greyhounds which has resulted in the governance of those bodies being questioned and, in some cases, with the relevant governing bodies being replaced.

This is likely to result in ongoing inquiries, potential legislative developments and greater governmental involvement.

What developments do you anticipate, perhaps legislative, regulatory or otherwise, affecting the industry foreseeable in the near future?

Antonio Rigozzi: In the context of doping I do not anticipate significant legislative development in the near future. There already has been a new WADA Code in place since 2015, which was the result of considerable negotiation and discussion by the affected stakeholders.

With respect to FIFA, there have been very significant changes in recent years culminating in the adoption of a robust Code of Ethics in 2012 and the establishment of a two chamber Ethics Committee. In the wake of recent developments, a FIFA Reform Committee was established, which was overseen by a respected independent chairman. It is anticipated that this committee will propose reforms which may include internal regulatory changes to help enable FIFA to confront these challenges.

In Switzerland itself there has been ongoing debate at the parliamentary level which has recently led to the introduction of laws which would empower Switzerland to take a more direct role in the fight against instances of corruption in sports federations domiciled in Switzerland.

Benoît Keane: The European Commission’s other initiatives in the Digital Single Market in addition to its competition inquests will be watched closely by the sports and entertainment sectors. Notably, the Commission is planning to overhaul the EU copyright regime for online digital content. The Commission is also reviewing the Audiovisual Directive to examine whether the scope of the Directive relating to television and on-demand services should be expanded to include online platforms and intermediaries (eg, search engines, social media, e-commerce platforms, app stores and price comparison websites). As part of this review, it also examining whether the regulatory regime put in place by the Audiovisual Directive is fit for purpose (eg, the provisions relating to advertising, hate speech and the protection of minors). Given the importance of these EU laws for the sports and entertainment sectors, it is vital that rightholders engage fully in the EU legislative process.

Susan Abramovitch: The government of Canada recently amended the Copyright Act to extend the protection of sound recordings from 50 to 70 years from first release. This brings Canada in line with international standards. Interestingly, the extension was not applied in this amendment round to musical compositions. The resultant extensive commentary and advocacy in the entertainment community on this point no doubt will lead to the increase to be equally applied to musical compositions at some stage in the future.

At the provincial level, Ontario recently passed the Protecting Child Performers Act. The Act sets out minimum protections for children under the age of 18 working in the entertainment industry and receiving compensation for that work. These protections will include, among others: requiring employers to provide extensive disclosure to the child’s guardian regarding the work they will perform, before a contract is signed; requiring time to be scheduled for tutoring of the child performer; and requiring employers to directly deposit a portion of the child performer’s earnings into a trust. The Act sets out additional specific requirements for child performers in both the “recorded entertainment industry” and the “live entertainment industry”. The Protecting Child Performers Act is scheduled to come into force on 5 February 2016.

Sven Demeulemeester: The European Commission has shown little appetite so far towards challenging sports governing bodies’ regulations. The Commission’s current position seems to herald a “hands-off” approach to how governing bodies organise their respective sports. My feeling is that many of the discussions currently dominating sports law practice involve principles underpinning EU law (antitrust, the internal market and even the EU Charter on the Fundamental Rights), as a result of which the EU Commission – or, alternatively, the Court of Justice of the European Union – may join the debate sooner rather than later.

Jamie Nettleton: The recent changes within FIFA attracted public criticism of Football Federation Australia relating to Australia’s bid for the 2022 FIFA World Cup. However, although there were some initial concerns, that commentary appears to have lessened.

The governance of sports, in particular racing bodies, is very much under analysis currently in view of the “live baiting” scandal and we anticipate that there will be developments in the coming year.

We have heard a lot about the increasing pressures resulting from the rise in professional athleticism and a growing number of players wanting to maintain a living from their skill. How is this trend impacting the industry and what role do you see lawyers playing in this?

Antonio Rigozzi: In football, there has been explosion of cash at the very highest level of the game with massive salaries paid to a small elite group of players playing in a small number of European clubs. This is a direct consequence of the large amounts of money being generated by TV rights deals and a global appetite to watch the top clubs and players.

This has led to a financial saturation for the top clubs and players whereas the majority of players and clubs that are not as marketable are experiencing commensurate financial hardship caused by falling public interest.

This can have the direct effects of ensuring that a growing number of players struggle to generate an income that can support them and some players that sign employment contracts with clubs can find themselves in situations where the club is not in a position to honour the financial terms of the contract.

The role of lawyers in this context is quite limited as in my view the issues arising are driven primarily by market forces. Perhaps the most suitable role that a lawyer can play is to try and keep sports teams and athletes focused on the medium to longer-term consequences of contracts they sign. By way of example, in football clubs this could relate to advising on UEFA Financial Fair Play obligations. In advising players this could relate to ensuring that they understand their rights vis-à-vis a club when there are failures on the part of the club to respect financial obligations.

Benoît Keane: In my view, it is important that sports federations and EU policy makers assist athletes and players throughout their careers. The European Court of Justice upheld sports regulations under EU law that support training compensation rules for clubs under EU free movement rules whilst the European Commission has endorsed the development of locally trained players. These precedents have assisted sports federations to design training programmes that give athletes the right start to their career. Another important development has been the signature under the framework of the EU social dialogue process for professional football of the Agreement on Minimum Requirements Standard Players Contracts. It ensures that player contracts throughout Europe meet certain minimum standards. Finally, there have been important EU initiatives to assist athletes with retirement from professional sport, such as programmes to encourage dual careers. This holistic approach to a career in sport is only to be encouraged.

Susan Abramovitch: This pressure among professional athletes to maintain a living from their skill is equally prevalent among musical artists. Artists are increasingly pressuring to ensure that they are fairly rewarded for the use of their work. This can be a challenge given the speed at which we are changing the way we distribute and consume music. One such challenge arose with the rise of digital music streaming services. Record labels are now receiving large payments from these streaming services for access to their catalogues. Many artists are not receiving their full share of such benefits as these payments are not directly attributable to their works. Lawyers will play a key role in ensuring that any agreements their clients enter into are sufficiently forward-thinking such that they capture these new ways of monetising their clients’ works.

Sven Demeulemeester: There is a clear increase in the number of professional advisers surrounding professional athletes and assisting them in how to manage their ever more complex contractual issues and tax and estate planning. Lawyers have a clear role to play in respect of these areas.

Jamie Nettleton: There is currently a dispute within Australian football between the players and the governing body, Football Federal Australia, relating to pay.

This is an issue affecting all players including the international teams, with the international team for women (Matildas) recently calling off their planned tour of the United States. This dispute with the players is likely to be ongoing, with claims by the sporting body that it has insufficient funds to meet their demands.

We anticipate that there will be an increase in the number and range of disputes in this area. However, football is only one example; there are likely to be similar complex issues arising within other winter sports in Australia, such as rugby league and Australian football, partly due to the substantial increases in revenues received from the grant of broadcasting rights, and whether there is a sufficient return being distributed to the players.

In your jurisdiction, how would you describe the current legal market in terms of the prospects for full-service and boutique firms?

Antonio Rigozzi: In the area of sports and in Switzerland in particular I would describe the legal market as being quite small as there are a limited number of lawyers who have the relevant and necessary specialised experience needed for sports disputes. It is rare to see lawyers who are not already known for being involved in sports disputes being engaged to represent parties.

Commonly, Swiss sports lawyers work out of boutique practices as opposed to full-service firms. Sports disputes vary considerably in value so it is often not financially practical or appealing for a full-service law firm to act.

Benoît Keane: As a lawyer specialised in the application of EU law to the sports and entertainment sectors, I find myself part of two distinct legal communities: on the one hand the EU law community (notably in Brussels) and, on the other, the sports and entertainment legal community. Although Brussels had a number of boutique EU law firms, it has now become the preserve of large international firms. I developed my own EU law career in such international firms. However, my contact with the sports and entertainment legal community, where there are still many boutique practices encouraged me to think differently about my EU law practice. In 2012, I decided to strike out on my own as I could see that there was growing need for an independent and experienced EU lawyer dedicated to the sports and entertainment sectors. With that said, I do not see it as a battle between the boutique and full-service law firms. I often work as part of a team with full-service law firms as well as with boutique sports and entertainment law firms so that the client has the best legal team to assist them. I have acted in this capacity before the EU courts, national courts as well as before the European Commission. After three years, I can confidently say that the EU law boutiques are back in Brussels!

Susan Abramovitch: The legal market is currently undergoing a retraction and there is a trend of clients requesting more cost certainty, whether in the form of alternative, flat-fee arrangements, or through other innovations. As an international full-service firm Gowlings can leverage its resources to provide added value through innovation to its clients. We have recently introduced Gowlings Practical – our legal project management system. This approach makes it easy for us to work with our clients to scope out and plan their matters. It allows us to staff our teams in the most efficient manner, provide greater cost predictability and monitor the progress of work on the matter so that we can give clients timely updates and deliver upon client expectations.

Sven Demeulemeester: In Belgium, the sports law market is undergoing a transition. Traditionally, sports lawyers were solo practitioners who mainly dealt with disciplinary proceedings. Today, clients in the sports sector require a fully fledged sports practice with a multidisciplinary approach that is able to deliver expert advice in every field of law impacting upon the practice and organisation of sport. Accordingly, law firms, such as our own, have organised themselves into large, multidisciplinary sports law teams. Such teams must be able to combine wide-ranging experience with a thorough understanding of the sports business.

Jamie Nettleton: In general terms, there are reasonable opportunities arising at the medium and senior levels.

What are the hiring opportunities in your jurisdiction and do you have any advice for aspiring lawyers?

Antonio Rigozzi: I would suggest that new hiring opportunities are limited and it is highly competitive to gain entry into the market with many young lawyers interested in pursuing a small number of positions.

For aspiring lawyers eager to work in the industry the best approaches lie in undertaking specialised masters (ideally in course with close connections to the industry) and publishing articles on current developments of relevance to sports law practitioners.

Benoît Keane: I will answer the hiring question from the perspective of EU law in Brussels as this is where I forged my career. It is an unquestionably competitive market with talented young lawyers from all over Europe seeking opportunities. Many will have studied a master’s degree in EU law and/or undertaken an internship in the European Commission. With that said, it is perhaps one of the most open-minded legal markets in the world as most law offices in Brussels have lawyers from all over Europe and beyond. So competition is tough but fair.

For aspiring lawyers of any discipline, I would say: turn on your Facebook privacy settings before you apply for a job; research the law firm so your application is tailored to that practice; and look for opportunities to write articles or give presentations so that you become a leader in your chosen field. And once you qualify as a lawyer, never stop looking for new challenges that will make you a better lawyer.

Susan Abramovitch: There is a structured process in Ontario for hiring students out of law school that is governed by the Law Society of Upper Canada. Two of the most beneficial things an aspiring entertainment lawyer can do is gain experience in general commercial law and in the industry. Showing a history of interest and engagement within the entertainment industry will make an aspiring entertainment lawyer stand out from the crowd. Whether it is through work or volunteering, those types of experiences and connections will give an aspiring entertainment lawyer an understanding of the industry which will not only be beneficial when seeking out hiring opportunities, but also in their future practice.

Sven Demeulemeester: This is a good time to become a sports lawyer as the professional sports business is clearly booming. Aspiring lawyers who are multilingual may be better placed as, by definition, this is a globalised industry. Becoming a sports lawyer requires being willing to invest time and resources in mastering both the law and the – sometimes intricate – regulations and dispute resolution mechanisms of sports governing bodies. Finally, as the sports law community is fairly close-knit, an aspiring lawyer should participate in one of the sports law associations.

Jamie Nettleton: The real difficulty exists at the graduate level due to there being a substantial excess of the number of graduates finishing law studies, and the number of positions available in private practice.